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Jones: Common sense and discretion needed on motor database

Speech to the House of Commons.

"I am grateful to Mr. Speaker for allowing this short debate on the motor insurance database.

There can be no doubt that the problem of uninsured driving is significant in the United Kingdom. It is estimated that one in 20 cars on the road is driven without proper insurance, and according to the Motor Insurers Bureau the consequence is to push up insurance premiums for honest motorists by £15 to £20 per person per annum.

Since 1946, the bureau, of which all motor insurers are members, has been obliged to pay compensation for injuries caused by uninsured drivers, so the greater the number of uninsured drivers on the road, the greater the cost to the rest of us.

Clearly, everything possible should be done to deter uninsured driving, and to punish those who drive without insurance, so section 165A of the Road Traffic Act 1988 was welcome. The measure was introduced into the Act by section 152 of the Serious Organised Crime and Police Act 2005. Under subsection (3)(c), a constable is empowered to seize a motor car if he "has reasonable grounds for believing that" it is being driven without insurance.

Such a power is eminently desirable, and was generally welcomed by all parties. The motor insurance database, which is maintained by the Motor Insurers Bureau, is key to the implementation of the powers in section 165A.

The database was established to enable the UK to achieve compliance with the 4th EU motor insurance directive. That was implemented in January 2003, and required the UK to create an information centre to facilitate easy identification of the valid insurer of any vehicle registered in this country.

It can be readily appreciated what a mammoth task it is for the bureau to maintain the database. It stores details on individual insured vehicles, fleets, motor trade and self-insured entities, and currently holds no fewer than 33 million records.

Fundamental to the maintenance of the database is the active participation of the motor insurance industry.

All motor insurance companies are subject to an obligation to submit data to the database within 14 days of the "inception, change, cancellation, lapse or renewal" of all motor insurance policies, and penalties exist for failing to provide such details.

By virtue of regulations introduced in 2003, insurers are liable to a fine of £5,000 for failing to provide information, for making a statement that is known to be false in a material particular, or for recklessly making a statement which is false in a material particular.

The target time for providing data to the database will be reduced to seven days from the beginning of 2008. According to a parliamentary answer, already, "94.4 per cent. of all appropriate records are provided to the...database...within seven days."

It seems at first sight that the database is being maintained to a highly accurate level. However, given that there are some 33 million insured vehicles on the roads and, based on the Department's figures, there is a 5.6 per cent. level of inaccuracy, it follows that the insurance details of around 1.5 million vehicles may not be accurately recorded on the database at any one time.

That is hardly surprising because tens of thousands of motor vehicles change hands every day, and thousands of policyholders change their insurers to obtain a better deal. The consequences of such inaccuracy can be serious. I was first alerted to the problem, and was prompted to apply for this debate after I was approached some three weeks ago by my constituent, Mrs. Maureen Smith, of Rhos-on-Sea. Her story illustrates the difficulties that can arise from a database that is not accurately maintained.

Mrs. Smith had lent her car to her daughter, Mrs. Helen Parry. Mrs. Parry, who is 29, maintains her own motor insurance policy, which permits her to drive a vehicle owned by another person, with that person's consent.

On her way home, which was only a few miles away, Mrs. Parry was stopped by North Wales police officers, who were apparently carrying out a routine check. The officers, on being given particulars of her identity, told her that a check on the database indicated that she was not insured to drive the vehicle.

Mrs. Parry explained that, although the car belonged to her parents, she was insured to drive it under the terms of her own policy. The officers checked the database again and told Mrs. Parry that that was not the case because she was not insured, so they seized the car. She was relieved of the keys and was obliged to stand in the rain at the side of the road until her mother, the car owner whom she had called on her mobile phone, appeared on the scene. For the sake of completeness, I should mention that Mrs. Parry, who is a nurse, was at that time 20 weeks pregnant.

On arrival, Mrs. Smith told the police officers that, irrespective of their views of the legality or otherwise of Mrs. Parry driving the car, they were aware that she, Mrs. Smith, was insured to drive it and asked for her keys back.

The police officers refused to return the keys, and Mrs. Smith was obliged to attend Llandudno police station, where she had to pay a £105 fee for the release of her own vehicle. At the same time, Mrs. Parry, her daughter, produced documentary evidence that she was indeed insured to drive the vehicle. By then, she had been issued with a fixed penalty of £200 and her licence had been endorsed with six penalty points.

To the immense credit of North Wales police, when they discovered the error, they arranged for Mrs. Parry's endorsement and penalty to be cancelled and for Mrs. Smith's £105 to be returned to her. To be fair to North Wales police, they went beyond the call of duty and presented her with a large bouquet of flowers.

It seems that the information provided by Mrs. Smith's insurers. Direct Line, to the motor insurance database, was erroneous, and I have since discovered that the details of around 400,000 motorists insured by that company had not been provided to the database within the required time frame, so it is unclear how many other policyholders have experienced similar difficulties. Direct Line told me yesterday that it has now supplied the required information to the database, albeit very late.

Another example of the problems that can arise from inaccuracies in the database was recently outlined to me by Mrs. Jane Groves of Liverpool. Last month, Mrs. Groves decided to change her insurer from Asda to the Post Office, naming her partner on the policy as an authorised driver. She did that by telephone, as many policyholders do. Two days after she had changed her insurer, her partner was stopped by the police, who had consulted the database and discovered that the Asda policy had been cancelled, but not that the new policy had been issued.

Mrs. Groves's car was seized, and it was not until she received a faxed copy of her motor insurance certificate from her new insurer some two days later that she was able to recover her car. She also had to pay a release fee of £105, but so far has not had it refunded. Indeed, she may well never have it refunded because the seizure was legal as it was based on the information on the database.

I have asked the Home Office for the number of occasions on which vehicles have been seized under section 165A of the 1988 Act, but was surprised to be informed that that information is not collected centrally. I suggest that the Home Office should arrange to collate such information because I suspect that there may be a large number of such cases.

Indeed, another constituent of mine has contacted me to say that recently he had a lucky escape from such a seizure, and I have also been told of a wedding party in Sheffield which was deprived of its vehicle on the way to church because of a similar problem. I am consequently grateful for having had the opportunity to highlight the problem today.

I repeat that I consider section 165A of the 1988 Act to be necessary and desirable. The database is an essential component in the drive to rid our roads of uninsured drivers.

They are a menace to others, and they cost honest motorists hundreds of millions of pounds per annum. The problem lies not so much with the database, as with the way in which it is used by the police, and the promptness with which insurers update it. It is accepted that the database will always be less than 100 per cent. accurate; that must be the case, and there are many reasons why.

At the lowest level, there is the inevitable administrative delay while the insurer supplies the necessary information to the database to record the issue of the new policy. That normally takes place well within the target 14 days. Indeed, the seven-day target, which will be introduced in 2008, is already met in the vast majority of cases.

However, there have been occasions—I have been alerted to one such incident by a constituent of mine, Mr Anstey, of Old Colwyn—on which the insurers have failed to provide details of the amendment to the database for many weeks after the policy was issued. I have already referred to what appears to have been a flagrant omission on the part of a major UK insurer.

Certainly, penalties exist for failing to provide the information, but such penalties should be imposed far more vigorously to ensure that insurers comply with their reporting obligations. Further, although penalties exist for failing to provide the information, or for recklessly providing inaccurate information, penalties do not exist for providing inaccurate information negligently.

Police officers ought also to be aware of the problem of delay and to exercise a degree of common sense and discretion when, for example, the policy has apparently lapsed very shortly before the motorist is stopped. Mrs Groves's case is a prime example, and in such cases, further inquiries ought sensibly to be made.

Police officers ought not to be heavy-handed in their use of the database. However, in many police forces there is a target-driven culture, with officers encouraged to amass a certain number of points during a particular period, and with a varying number of points given for various offences.

Certainly, such a system prevailed in north Wales until recently. It amounts almost to an encouragement to police officers to seize the vehicle, issue the fixed penalty notice and leave it to the motorist to argue the toss later. That cannot be right.

Finally, I suggest that insurance companies that do not do what is necessary to help to maintain as accurate a database as possible by providing accurate information in a timely manner should be obliged to compensate motorists for losses incurred when a vehicle is seized as a consequence.

The database, in short, should be treated as a very useful tool, but not as infallible; police officers should be told of the need to use it with discretion and common sense. There should, further, be uniformity in such guidance. Again, in an answer to a parliamentary question, I was surprised to learn that, at present, the issue is left to individual forces as an operational matter. If police officers do not use discretion, injustices of the sort experienced by Mrs. Smith, Mrs. Parry, Mrs Groves and, I have no doubt, many others will continue to occur.

I am pleased to have had the opportunity to raise the issue in this short debate, and I look forward to the Minister's response to my points."

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